Amkor to buy Toshiba's Malaysia subsidiary

SAN FRANCISCO—Toshiba Corp. said Friday (Sept. 30) it signed a deal to sell its Malaysian test and assembly operations to Amkor Technology Inc. Financial terms of the deal were not disclosed.

Toshiba and Amkor expect the deal—which also includes Amkor licensing certain intellectual property rights from Toshiba—to close in January 2012. According to a report by the Reuters news service, the deal is expected to be worth several billion Japanese yen.

Established in 1973, Toshiba Electronics Malaysia Sdn. Bhd (TEM) has steadily expanded the scale of its assembly operations, primarily of discrete and analog semiconductors, according to Toshiba. In recent years, its main product has been power semiconductors, Toshiba said.

Toshiba said it would continue to subcontract power semiconductor assembly and test to TEM. Toshiba will shift its focus and resources to front-end wafer fabrication for power semiconductors by reinforcing production capabilities at Kaga Toshiba Electronics Corp, Toshiba's discrete semiconductor production base in Japan's Ishikawa prefecture, the company said.

Toshiba said it positions power semiconductors as a driver of growth for its semiconductor business and seeks to maximize cost competitiveness across its front- and back-end operations. Transferring ownership of TEM to Amkor will allow TEM to take advantage of Amkor's large scale production and material procurement capabilities and boost the overall efficiency of its power semiconductor operations, Toshiba said.

I have seen so many US companies move their back end and also the front end to outside companies. I think it is because so many of the executives listen to the bean counters instead of making their own business decisions. It may be best for the dollar today, but long term it may be detrimental to the company.